Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Friday, September 28, 2007

SEC Charges Spouse With Insider Trading

On September 28, the SEC announced  the  filing  of  a  settled action  against  the  spouse  of  a former   officer   of   Triangle Pharmaceuticals, Inc. (Triangle)  for  illegal  insider  trading.  The Commission's complaint, filed in the United States District  Court  of the Eastern District of North Carolina, alleges that, between  October 2002 and November 2002, Daniel  Joseph  McKay  (McKay)misappropriated from  his  spouse,  who  was  then  an executive  vice  president  of  Triangle,   the material   nonpublic information that Triangle  had  received  an  acquisition  offer  from another company. The  Commission's  complaint  further  alleges  that, after misappropriating  this  information,  McKay  purchased  Triangle stock and tipped two of his  siblings,  who  also  purchased Triangle stock. As a result of this illegal conduct,  McKay  and  his  siblings obtained a total of $11,416 in ill-gotten gains. With filing of the Commission's  action,  McKay  has  agreed,  without admitting or denying the allegations in the Commission's complaint, to the  entry  of  a  final  judgment  permanently  enjoining  him   from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, thereunder, and ordering him to pay (i)  disgorgement  and prejudgment interest totaling $12,458.98 and (ii) a civil  penalty  of $11,416.

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